On the first day of the Consumer Electronics Show (CES), 2015, Intel® introduced its line of 5th generation CORE™, “Broadwell”, processors. These new additions include the CORE m processor, which was introduced in early December, 2014, and is notable as a first in consumer grade 14 nm chip technology.

The capability of this hardware form factor (which works fine without a fan) to run completely standard versions of the current Microsoft O/S release should not be under-appreciated. HP is presently selling a model of its Envy consumer-grade PC line, powered by a CORE m and 8 GBs of RAM. This hardware can easily support a Linux Virtual Machine, not to mention any of the 3rd party software targeted to the Windows 8.1 user community.

Price is a drawback. HP displayed a price of $949.99 for the Envy device on its website on January 5, 2015. On the same date, I noted Lenovo promoting a “Yoga 3 Pro 2-in-1” powered by the CORE m at an even higher price of $1,199.00.

The initial market for this technology is, therefore, the high end of the laptop/notebook consumer, which may limit its sales promise to consumers in need of a refresh for existing hardware. But a combination of better marketing communications, together with consumer appreciation for the capabilities of the hardware I have not discussed in this post (readers are recommended to read Clark’s post, or to review the pages I have mentioned on Intel’s website to obtain this information), should help these devices make a positive contribution to the Intel OEMs opting to bring them to market.

I will discuss the marketing communications point in the next post to this blog. The point of the communications effort is to better inform consumers about the benefits of devices like these, which are powered by a full-featured O/S (Windows 8.1), versus lower cost competitive options with neither the support of a comparable O/S, nor a reliable promise of an upgrade path given a plethora of versions (I’m thinking squarely about Android here).

During Oracle’s Q2 2015 earnings conference call, Larry Ellison, Executive Chairman and CTO informed his audience of analysts about the importance of platform as a service, PaaS to Oracle’s strategy to grow its cloud business. Per Ellison, PaaS is the differentiator promising to elevate Oracle’s cloud business from the commodity-driven world of infrastructure as a service (IaaS) to something more attractive, meaning a product with more promising return on investment given Oracle’s commitment to product development, general and administrative (G&A) expenses, and sales and marketing.

So what is the core of Oracle’s PaaS offer? Per Ellison, PaaS for Oracle amounts to the combination of the Java software language and Oracle’s database product. Ellison did not mention hardware, but, Mark Hurd, one of the two co-Presidents of the company (Safra Catz is the other co-President) cited surprising strength in sales of Oracle’s SPARC super cluster, and the SPARC database appliance later in the call during an answer to a question.

Leaving aside the highly competitive tone of Ellison’s comments (he mentioned Salesforce.com and Workday as direct competitors at numerous points), his PaaS claim is, in my opinion, credible. Oracle has demonstrated a clear commitment to defend the proprietary nature of its Java language, so it should be safe to assume customers will have to pay a price should they opt to use the language to customize solutions, build tools, etc. There was absolutely no specific mention of individual database products throughout the conference call, so it is also likely safe to assume management is confident in the attractiveness of Oracle’s traditional RDBMS products for its new found customer base for cloud offers. Of course, coming quarterly reports should be carefully reviewed to see if any mention of database product mix pops up. I was eager to hear some mention about the condition of Oracle’s own NoSQL database, but there was no mention of it. The only references to “big data” came up when Ellison spoke about Oracle’s Exalogic and Exadata servers.

The lengthy list of prominent larger businesses already committed to Oracle’s cloud offers, which Mark Hurd referred to as a list of “icons” is impressive, and, further, is also indicative of why a company like Oracle (much has been the case, I would argue, for Microsoft, as well) truly can benefit from expanding the volume of its cloud activity — and get paid for it. After all, each of the companies behind these icons is probably hosting one, or more of Oracle’s on-premises solutions. Oracle, Microsoft, IBM, SAP and EMC each stand to benefit from robust customer interest in hybrid computing scenarios as the result of large installed bases of on-premises computing systems.

Microsoft looks to benefit on multiple fronts from its recent announcements of free Office apps for iOS and Android mobile consumers. But one in particular looks especially promising. Developers will be much more likely to implement its Office 365 APIs and SDKs when consumers, recently hooked on free versions of Word, Excel, and more, with limited functionality, present a burning need for these tools.

Flipping an old attempt to encourage developer interest into a winner by publishing a set of APIs and SDKs may look like a correct strategy for Microsoft to pursue, at least on paper, but if consumers haven’t articulated a significant need for the tools developers can bolt onto their mobile apps with these extensions, then the end result will, unfortunately, be a comparable low level of interest. In other words, developers will have little incentive to implement APIs and SDKs for Office 365 without consumer demand.

The announcements of free, albeit limited versions of Word, Excel, PowerPoint, and other Office apps looks perfectly designed to prime the need pump. At the same time, Microsoft’s recent announcements of partnerships with DropBox, and a few months back, Salesforce.com, which provide these ISVs with a path into the Office 365 ecosystem, look just the same; in other words, a method of driving developers to build hooks to Office 365 into their mobile apps.

Back in 2001 Microsoft introduced the first application layer support for Intel’s then new line of 64 bit CPUs for consumers. But in the 12 years since the first release of 64 bit Windows, not much headway has been made to replace “win32” applications with 64 bit solutions. As Joe Bellfiore demonstrates during the Keynote presentation for Microsoft’s Tech Ed Europe 2014 event, with Windows 10 Microsoft has approached the task from a different angle: trying now to make sure user enjoy the same satisfactory experience, regardless of whether or not an application is written for 64 bit CPUs, or not.

Leaving aside, for the moment, the question of what’s really changed, under the Windows 10 hood to make this happen, the result Bellfiore demonstrated is certainly preferred and likely to win Microsoft new fans for Windows 10. This writer is participating in the Windows 10 Preview effort. It is now possible to open so-called “tile” apps and run them directly alongside legacy Windows applications without issue. In contrast, the Surface 2 RT experience leaves a lot to be desired and, for most consumers, would likely fall somewhere substantially below the “acceptable” level.

But perhaps Bellfiore could have simply presented the vastly improved performance of this latest version of Microsoft’s O/S without the associated claims about everyone sure to “love” it. Enterprise IT organizations are more likely to approve use of this O/S anyways simply as a result of the better stability of the O/S and the job Microsoft has done to stabilize system performance regardless of application type.

The webcast recording of Bellfiore’s presentation captures the enthusiastic response of the audience as Bellfiore demonstrated the new capability to copy and paste between applications running within Window 10’s GUI and a command line. So it’s safe to assume a number of converts over to the Microsoft view of the future of desktop computing were made during this section of the Keynote.

On a related note, Bellfiore’s demonstration of how the tile desktop has been built into the Windows Key display is worth noting. A highlight of the Windows Preview experience has been the improved accessibility of tile apps via this new view.

Anyone watching the Windows 10 segment of the webcast of the Keynote presentation from Microsoft’s Tech Ed Europe 2014 event will likely catch the appeal Joe Bellfiore, Corporate Vice Presdident, Windows Division is making to the enterprise business attendees in his audience. The old branding message “Windows is the best O/S for all types of computing” has been replaced with a new pitch characterized by its razor sharp “focus on enterprise” computing and the people responsible for its success within a typical organization.

What follows is a rhetorical argument (made up of 4 cornerstones) of why enterprise IT organizations, and the CIOs at the top, should look favorably on Windows 10, whose “first phase of engagement is really aimed at an enterprise audience”. The four cornerstones are:

One converged Windows Platform

A product people will love to use

Protection against modern security threats

Managed for continuous innovation

But the house to be built on these cornerstones is really a rebuild of the old edifice where new computing solutions popped up in organizations as the result of IT’s efforts to introduce them, and an attempt to bring down the dominance of lines of business (LoBs), who have recently staged a coup named BYOD and wielded a sword called consumerized IT to wreak havoc for the teams of computer support personnel ostensibly responsible to manage their computing activity.

In this writer’s opinion, the second cornerstone is nothing new. Microsoft has attempted, all along, to claim the title of best O/S for all types of computing. One need only reflect on one of the video ads for the original Surface tablets, titled Microsoft Surface – Commercial HD to get this point.

A word of caution: this claim hasn’t worked in the past (skeptical readers are advised to just think about the comparatively poor sales performance of the original Surface to get the point. If it worked so well, why the $900 Million write down?) and doesn’t look likely to win in the near future. Further, enterprise IT organizations may actually like their new way of operating in catch up mode. Perhaps it makes more sense for spokespeople like Bellfiore to emphasize each of the other cornerstones, and back pedal on the second.

Jason Zander, a Corporate Vice President at Microsoft opened his segment of the Keynote presentation for Microsoft’s Tech Ed Europe 2014 with a compelling argument for the inevitability of big data. Zander presented some numbers indicating the global population of smart devices has now surpassed the entire human global population. The number of apps supporting these devices, and their users has also grown in geometric proportion. The result is truly big data — an enormous amount of information about each/every touchpoint for devices, users, and even data itself as they interact.

Zander’s rhetorical argument is yet one more articulation of one of the core planks of Microsoft’s 2014 communications brand — productivity. To sum up this theme, readers are asked to simply consider the impact of the “hundreds and hundreds of petabytes of data we already have” on the notion of what this writer refers to as the “dawn” of “information opacity” aka the Samuel Coleridge phenomenon (“Water, water everywhere, but nary a drop to drink”).

Zander points to cloud, and Microsoft’s Azure as a leading example of it, as the only method of powering all of the data produced by the global interaction of users and smart devices. It’s worth noting his mention of telemetry. There will be more to be said about this category of data, and its relation to the concept of an Internet of Things (IoT) throughout the remainder of the conference.

The presentation then shifts to another core plank of Microsoft’s 2014 communications brand — the slogan, first articulated by its CEO, Satya Nadella, and now re-articulated by each and every other spokesperson (including Zander) “Mobile First, Cloud First”. Zander echoes Nadella’s recent comments on the slogan, and pulls in the scalability plank of the market message. Mobile First, he stresses for his audience, requires ISVs like Microsoft to envision consumers in motion, implementing different devices, at different times, with the objective of accomplishing the same tasks or activities. The only way to satisfy this need for a uniform computing experience is to deliver the same quality across any/all device form factors. Nothing less will do.

In yet another gesture towards app developers and their stakeholders, Microsoft is rapidly publishing a very large amount of video content from its recently concluded TechEd Europe 2014 event. All of the content can be found on the Tech Ed Europe 2014 web site. As of the date of this post, Saturday, November 1, 2014, just a few of the webcasts available for public viewing included:

Keynote Presentation by Joseph Belfiore, and Jason Zander

Empowering Enterprise Mobility, led by Andrew Conway who plays a senior product marketing role for Microsoft’s Windows Server / System Center Business

Microsoft Azure for Enterprises: What and Why, led by David Chappell a Principal at Chappell & Associates

Azure Pack Roadmap and Ecosystem, led by Maurizio Portolani, and Robert Reynolds

Microsoft IoT Platform: Architecture Overview, led by Uli Homann

Each of the above 5 webcasts are worth some commentary over the next few posts to this blog. The second, “Empowering Enterprise Mobility” is of interest for information it may add as to how Microsoft has designed its entry into the market for Enterprise Mobility Management (EMM) aka Mobile Device Management (MDM) solutions. In this writer’s opinion enterprise business consumers are demonstrating a voracious appetite for EMM and/or MDM. The intensity of need makes sense; after all, with a majority of larger organizations supporting formal BYOD, BYOA and other policy structures to support personnel as they bring new devices, and systems into the internal computing realm. EMM and MDM, on paper, can provide central IT support organizations with the methods they need to permit this use while preserving control and making a best effort to safeguard company confidential information.

A lot has already been written about the fourth and the fifth webcasts. Azure Pack looks like the right set of components to transform Microsoft’s cloud, IaaS into something portable, the kind of solution Dell has brought to market in its recently announced “Cloud in a box” hardware device.

IoT is a subject of interest to this blog, so a presentation on Microsoft’s data communications architecture to support the billions of devices interacting under the IoT umbrella is a “must attend” event.

Microsoft, Google, and the recently announced joint marketing effort by Apple and IBM, are all presenting solutions to the consumer market for computing solutions around the theme of “productivity”. But, in stark contrast to how this type of competition plays out around commodity hardware (smart phones, tables, PCs, laptops), each of these ISVs is working hard to articulate a niche, highly differentiated message.

Satya Nadella, CEO of Microsoft mentions “productivity” as early as two and a half minutes into the forty nine minutes of the Microsoft Cloud Briefing event, which was held on October 20, 2014 in San Francisco. The core, mission-critical foundation stone of this brand message is, as follows: in 2014 there is simply too much information. Too much information results in no information (kind of like Samuel Coleridge’s line from his Rhyme of the Ancient Mariner, “water, water everywhere, but n’ary a drop to drink”). So the real imperative driving (and you can substitute your favorite mature ISV on this one) product marketing for computing is acquiring, understanding, categorizing, and prioritizing all of this information, behind the scenes (via machine learning) so an individual can do something with it.

Whether the solution is Delve, or Google Now, or Watson really doesn’t matter. Each of these intelligence platforms is out there to service individual needs to better manage information in a world where, literally, one thousand times the amount of information is available, at comparatively little or even no cost. Each of the competitors in this market is betting on the enormous value of this low cost pool of information, once it is packaged effectively, for consumers.

It’s refreshing to see how none of these competitors has reverted to a “competition to be the best” strategy. The market for the type of computing capability behind the notion of “productivity” as each industry spokesperson articulates it, promises substantial revenue. Treating it as a commodity would be real fool’s play.

During Microsoft’s recent Q1 2015 earning conference call, Brent Thill of UBS asked a question at the start of the analyst Q&A. This question provided Satya Nadella with an opportunity to present something about the importance of hybrid cloud computing to Microsoft’s success for the quarter. When asked what makes Microsoft’s cloud experience different from its peers, Nadella answered:

“As it turns out the technology that we build for our cloud is what we incorporate in our server products, in fact our R&D expense is the same expense. And that’s made our server products very competitive. And so again those our traditional competitors we’re seeing significant share gains across the entire infrastructure line of our server products in particular. And we hope to architected our cloud very differently. We are the only hyper scale cloud provider that also thinks of our server product at the edge of our cloud.” (quoted from a transcript of Microsoft’s Q1 2015 earnings conference call as published on Seeking Alpha)

The reference to “server product at the edge of our cloud” introduces hybrid cloud computing — where on premises and cloud servers are architected into a coordinated, comprehensive computing solution — to this otherwise purely financial discussion of Microsoft’s business performance for the quarter.

Microsoft certainly is uniquely capable of demonstrating the veracity of Nadella’s point, at least with regard to its more obvious cloud competitors — Google and Amazon. Noticeably absent from the comparison was IBM, which, (along with other mature ISVs firmly established in the typical data center for a large enterprise business), is, truly, an example of the only competition Microsoft is likely to face for this application of client server computing. Neither Google, nor Amazon supports an installed base of on premises client server computing for their own IP, so they cannot compete with Microsoft in the hybrid cloud computing space.

Regardless of who else offers solutions capable of satisfying enterprise business consumer appetite for this type of computing method, the appetite is nevertheless real and strong. A lot of research is available on the topic from most of the most popular analysts, but for readers otherwise unfamiliar with market demand for this type of computing platform, take a look at this blog post published yesterday, by Richard Fichera, and Analyst at Forrester®.

In this writer’s opinion a lot of the momentum in Microsoft’s cloud earnings report can, and should, be attributed directly the role played by Microsoft’s installed base of hybrid cloud systems. We have first hand, absolutely current experience with SharePoint and how organizations are implementing Office 365, SharePoint Online, in conjunction with SharePoint on premises. These organizations represent, literally, thousands of users. Therefore, the financial impact of this customer base should not be underestimated.

On Thursday, October 16, 2014, Google reported earnings after markets here in the US closed. Fiscal performance for the latest quarter failed to meet analyst expectations, for both sales and net income. A lot of business writers produced copy on the topic of whether or not Google’s performance for Q3 2014 says something about the future of their core business — meaning pay per click (PPC) advertising.

We think the quarter’s performance does say something on the above mentioned topic. Click advertising, with Google at the helm, has been a big example of how to move the kind of “lowest common denominator” marketing communications found everywhere on television, to the web. Instead of evolving into a tool promising big returns to average advertisers (meaning SMBs), PPC advertising has become even more difficult to capitalize upon, especially for intangibles.

This trend doesn’t look to change anytime soon. A big factor putting “meat to this motion” is the obsession of Wall Street with explosive growth. The only venue where advertisers can expect explosive growth in the number of ad impressions, is mobile computing, which is dominated by small screens (smart phones and tablets). So click ad campaigns have to be built to look good on “cards”, etc.

But does anyone looking for a complex solution to a business need think about surfing the “mobile web” from a smart phone to find a solution? We don’t think so. Apparently a lot of Google’s advertisers agree. The company reported an over twenty five percent drop in the rate of growth at which its paid click business is growing (17% for the current quarter vs 25% for the same quarter in fiscal 2013), year-over-year, for the 3rd Quarter 2014. This drop might not look like a big deal to Google fans, but to anyone considering the quarter from a perspective to render an opinion as to the long term viability of the click ad business, “it ain’t looking too good”.

We don’t think Google is especially pleased with its core business, hence all of the efforts it continues to make to horizontally stretch the horizon of its business into completely disconnected product paths. Maybe someone will sum all of this product marketing chaos into the picture of a “right move”, but we don’t think this likely until one of these forays into the “wild blue yonder” of tech product land takes off.

Will it be robotics? Self Driving Cars? Cheap DNA tests? Smart Phones as eye glasses? We’re not sure, but stay tuned. Google is sure to go there, and go there before anybody else. At least as long as they have the cash to pay for the ride.